A Medical Device Daily

The operator of a chain of medical imaging centers in southern Florida agreed to pay $7 million to settle charges it billed for CT scans that were never performed, and also offering payments to doctors to send patients to its facilities.

The centers are owned by Boca Raton radiologist Fred Steinberg, MD, and operate under the umbrella of University MRI & Diagnostic Imaging Centers. The U.S. Attorney in Miami began investigating Steinberg after a radiologist who used to work at the centers filed a whistleblower lawsuit in 2002 alleging fraud.

The action against Steinberg comes as regulators have begun to more closely scrutinize the relationships between physicians who order scans for their patients and the centers that perform that work. As spending on medical imaging has boomed in recent years, doctors in many specialties have looked to cash in on the lucrative work by buying their own equipment or entering into deals with imaging centers that allow them to share in the profits.

In the settlement, a number of inducements were used to generate referrals, according to the whistleblower lawsuit and federal prosecutors. The imaging centers deny that any of the financial relationships with physicians were illegal or improper. In addition, the settlement allows the facilities to continue doing business with Medicare. Federal law prohibits healthcare providers from offering payments in exchange for referrals.

One arrangement referenced by the government and the whistleblower was "lease agreements" in which local doctors contracted with University MRI to scan their patients.

Other inducements offered to physicians for referrals included "medical director" positions for referring physicians and payments for clinical research, according to the U.S. Attorney's office. The whistleblower complaint charges that those arrangements required little or no work and were instead a way to pay doctors for referrals. The complaint names 11 physicians who allegedly participated in those arrangements, which paid as much as $6,000 a month.

The facilities also did CT scans and ultrasound exams that were not ordered by physicians and weren't medically necessary, according to the government.